We heard the unexpected news that the economy contracted for the first time in three years. For all the pundits who claimed that spending our way out of recession was the answer to our economic recovery, it hasn’t proved worthwhile. However, instead of acknowledging failed policy, the Left resorted to more blame and outright ignorance. [Read more…]
Archives for January 2013
There is a persistent idea circulating that the current tax margins are really not all that high when compared to past rates. This line of thought is typically used as justifications that 1) the government deserves more revenue and 2) the wealthy taxpayers can afford higher taxes. The truth, however, is that obtusely higher rates in the past were rarely ever paid at that amount because they were easily offset by abundant tax deductions universally used by the wealthy. [Read more…]
This past week, The Hill reported that the cost of Obama’s regulations for his first term were $518 billion, with nearly half of that –$236 billion – coming in the year 2012 alone. Expensive and prohibitive government policies such as these are the driving force behind the mass exodus of businesses abroad. [Read more…]
As the Senate prepares to pass the Sandy Hurricane Relief Act for $50.5 Billion, it’s worthwhile to consider this piece of legislation within the bigger picture of looming the fiscal crises. No one will deny that those citizens who were affected by this catastrophic and legendary storm deserve help. However, the bill perfectly encapsulates the dysfunction of our Congress. In merely a few short weeks, Congress has managed to figure out how to fritter away a year’s worth of revenue that was raised — after many months of wrangling and negotiations. [Read more…]
Did anyone else notice Justice Antonin Scalia’s headgear at the inauguration today?
Richmond Law Professor Kevin Walsh notes on his blog that
“The twitterverse is alive with tweets about Justice Scalia’s headgear for today’s inauguration. At the risk of putting all the fun speculation to an end . . . The hat is a custom-made replica of the hat depicted in Holbein’s famous portrait of St. Thomas More. It was a gift from the St. Thomas More Society of Richmond, Virginia. We presented it to him in November 2010 as a memento of his participation in our 27th annual Red Mass and dinner”.
Obama continuously tells us he has made jobs a priority. ”I will not rest until everyone has a job, a good wage, and benefits.” -Barack Obama, July 8, 2010.” So how does this assertion square with the revelation that Obama’s Jobs Council has not met in a year? [Read more…]
Obama wanted to let the Bush tax cuts expire for all. During his push all through election season, he tried to sweeten the deal with targeted tax breaks for small businesses. But this plan and strategy only clarified Obama’s lack of any real world business experience as well as his continuous capacity to undermine the economy. [Read more…]
From the Government Printing Office *and* the Heritage Foundation, here is the full text of Obama’s 2006 speech arguing vehemently against raising the debt ceiling (when Bush was President). [Read more…]
Under law, the White House must submit a budget this year by February 4. According to the Hill,
Late Friday evening, Deputy Director Zients confirmed that for the fourth time in five years, the president’s budget will not be submitted in compliance with the law,”
Only 1 budget out of 4 have been submitted on time — the budget in 2010. The rest of the years, the budgets were late. That year, the budget failed in the Senate 0-97. And last year, the President’s budget failed 0-414. Not one Democrat or Republican voted for them or was willing to sponsor them, because they were so outrageous.
Of course, this doesn’t mean we actually have a functioning budget for the United State. The Senate has not passed a budget since April 29, 2009 — which is currently 1356 days and running.
It’s okay to break the law when it comes to submitting a budget but dammit, we MUST NOT break the law when it comes to our ability to spend bumping up against the debt ceiling, or else “Social Security benefits and veterans’ checks will be delayed”, Obama sternly warned today.
And yet, in 2006, Obama voted against the debt ceiling. The NRO reports that Obama said at the time,:
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better”.
We certainly wouldn’t want to know what kind of spending proposals and debt problems are in Obama’s new budget now, would we?
Obama once again, is the president of “Do as I say, not as I do”.
The question of additional taxes on the wealthy is really a liberty and equity issue, impinging on the very entrepreneurial environment that made our country great. At the heart of any monetary decisions should be free will, not a free lunch.
Stop and think about it for a minute. In my adult life, in a free country such as ours, it is entirely my judgment as to whether or not I want to work hard and try to earn a lot of money, and/or risk my money via investments. Such choices are made only after careful deliberation. And one of the factors going into that decision is how much tax I will pay on my winnings, my successes. That is why it is unequivocally immoral that our government – or any government – should feel it has the place and authority to come along after I earned my success and basically declare that because I have done well for myself, I should have to pay more to that government. This is legal plunder.
I have right and the liberty to factor into my decision making process what the government states I must owe under law, and decide whether that amount and calculation would be amenable to my overall situation and goals. The government has no right to retroactively come along and declare that I must detract from my commitment to invest in my self, my education, my career, or anything else because it needs a greater revenue stream. Why should I, who have proven myself to be successful (according to the government) have to give my success over to people who have proven to grossly mismanage our country’s finances?
When people say things such as Exxon makes X so many billions of dollars a year and therefore they can afford to pay more, such a statement only reflects the gross naivete and ignorance of basic financial rules. Without a frame of reference, unless that number is coupled with how much money was invested or needed to be invested in order to earn that earnings figure, such a statement is worthless rhetoric. If a company makes $10 billion, but has $100 billion invested in the company (which is quite typical for major corporations), that would be a 10% return.
When put into that perspective of how much was invested to get that ROI, 10% isn’t quite so much. Would you invest millions or billions for the risk of a 10% return or the risk of losing it all? Most would not. If you have money invested in something like a bank that is a very safe investment, but you also get a pretty low return. If you are investing in something in which you have the chance of losing, you risk everything hoping to get that 10, 15, 20% return. With any investment, be it oil or a bowling alley business, you would not have access to that kind of risk capital unless it was strongly anticipated to get that larger-than-safe-return: you risk losing it all. And yet, many companies and individuals still make the investment. Good for them.
So then with those who were able to make a decent return on investment, Obama’s tax policies are simply a death wish for our country. If we go out in the free market looking at companies and individuals investing millions and billions a year, and the government leaves alone the ones who do poorly on their investments but leeches onto the winners, the successful ones, this is what it essentially tells them: you were so successful, we want and deserve a piece of your success. We are happy, though, to allow you to lose your money alone.
Doesn’t everyone see the lunacy and disingenuousness of going after the oil companies when oil is $100 a barrel but ignoring them when oil is $20 a barrel? Or screaming about their 4% profits yet say nothing about the government’s gas tax of about 18 cents per gallon? This type of targeted hypocrisy only supplies us with 1) more political posturing and talking points and 2) attempts at additional revenue streams.
Having a policy to target the winners with an additional tax after they become winners will eventually destroy those winners because no one will want to invest or earn over a certain threshold. This will stymie and financially ruin our country, founded upon the backs of small businesses, hard work, entrepreneurship, free minds, free society, and free economy.
Those who are prosperous should be given the same liberty to manage their success as any other citizen, not additional tax penalties. How can we honestly and morally take extra money from those taxpayers who have been able to create wealth and employment successfully and give it to the government and politicians who manage to continuously and egregiously squander income?
There are two important fiscal dates coming up in February: February 12 and February 15.
February 12 is the scheduled date of Obama’s State of the Union speech, which is also Lincoln’s birthday.
It also happens to be three days before the “X Date”, February 15, the estimated date that the Treasury may not be able to pay its bills. The debt ceiling deadline.
Does anyone want to speculate as to whether the President of the United States is going to announce during his State of the Union Address that he will be unilaterally bypassing Congress to raise the debt ceiling?
Picture the all-too-familiar scenario: it’s February 12th, and Congress will be deadlocked over raising the debt ceiling, cutting spending, raising taxes, and sequestration scenarios. We know that there will be no decision by then, because deadlines mean nothing in Congress – as we just witnessed with the fiscal cliff debates running down to the wire.
The Senate Democrats have already set up a plan in preparation. Senator Harry Reid sent a letter to Obama saying,
“In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt limit extension only as part of an unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary”
Such fiscal urgency from the same group that has failed to pass a budget since April 29, 2009.
Can Obama do this? That’s up for debate, as both sides of the aisle have given their evidence for or against such a move.
But wait. Does anyone remember the “We Can’t Wait” policy implemented by Obama in the fall of 2011, following the last debt ceiling showdown? The White House describes the program:
“President Obama is not letting congressional gridlock slow our economic growth. Without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs…. we can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will.”
The narrative is being shaped. We have Obama’s program “We Can’t Wait” in place. According to the whitehouse.gov , Obama has issued 45 Executive Orders under this program. Couple the program with Reid’s letter, the time frame for the State of the Union and the potential default of the Treasury, and you have a perfect storm.
Be prepared. Be prepared for Obama to trot out imagery, language and ideas from Lincoln and work them into his State of the Union address as a backdrop to an announcement on the debt ceiling. Obama can, and will, propose that “We Can’t Wait” for Congress to act (or not act) on a potential default – since it is certain they will be gridlocked – and will use an Executive Order lifting the debt ceiling limit. This will change the ensuing discussion on taxes, spending, and sequestration. But will it also change forever the nature and function of the presidency?
Most people like receiving a tax refund – it’s kind of like a windfall for many people, especially those for whom saving is a difficult discipline. However, getting a big tax refund from the IRS may not necessarily be the best thing for you in certain situations.
Try to think about your refund in a different way. Essentially, you are giving the government an interest-free loan, which they give back to you when you file your taxes. There’s really no reason to do that, other than you like the surprise surplus.
A lot of people don’t like the idea of owing the government, or are afraid they will not have the money available at tax time to pay the bill. That is a valid concern. However, if you adjust your withholding enough so that you owe on April 15th, that also means you have more money in your paycheck each month.
In reality, whether you owe the government or they owe you, the amount of tax collected is virtually the same. The difference is whether you have your taxes paid for you via your paycheck, and have a smaller paycheck because of it (and a refund in the spring), or whether you set the money aside on your own and have a little bit more to take home from work every pay period.
If you set your withholding so that you’ll owe at tax time, you are in essence holding your own money longer. This can be helpful in situations such as being in debt, where payments are due every month. By having extra in your paycheck due to having less money deducted for taxes, you could use the extra money to pay a little more on your debt, thereby reducing the amount of interest you pay in the long run. Some people prefer this approach.
Whether you like to keep your own money until tax time or whether you prefer the windfall method, you can achieve this your preference by going to visit your Human Resources administrator. If you want more money in your paycheck – and possibly owing the IRS, claim more dependents. If you prefer a refund, claim fewer dependents. The form to make changes on is called a W-4. It’s always good practice once a year to review your tax and financial situation and make adjustments as necessary.
You can also find this article over at my Examiner.com page — where you’ll be able to find other tax preparation advice from me.
Back in 2008 when Obama was debating Hillary Clinton on national TV, Obama noted that raising the capital gains rate would likely reduce federal revenue collections, but insisted it was good policy anyway — because it was a policy of “fairness”.
Why would raising the capital gains tax be a revenue loss? The effect of higher taxes on jobs and income would slow the economy. The two sides of the equation are the ones who think that a loss of jobs is worth the potential increased revenue, while others insist that the any positive revenue amounts would be fairly small and not worth the damage to jobs and the economy.
Certainly, at a time like this in our country when the economy is quite sluggish and unemployment is high, the last thing we need is a policy that hurts more jobs and income. Yet such a policy was just implemented. A hike in capital gains makes it more expensive for a business to raise the capital it needs to operate. What’s more, couple that with the new 3.8% surtax on investment income that begins here in 2013 (from the Obamacare legislation) and you have now an 8.8% tax hike for some people. Throw in the hike for those who make over $400k/$450K and you have even more taxes – on the very type of taxpayers who have money to create jobs and/or invest.
One has to wonder if the budget scoring being done by the Congressional Budget Office (CBO) on this tax will actually bill it as revenue collected, even though economists –and Obama — acknowledge it as a revenue loss.
The capital gains rate hike was a ruse, a shell game. Any revenue raised will be offset by slower economic growth. Is it worth it? Right now? It’s a shame for this country that Obama continued to push for a policy that would have a negative effect on jobs and the economy in an effort to promote “fairness through taxation” and try to level the field on his terms.